In my opinion it is a little tacky to publish the story in installments if it is already completely written and you don't intend to do any major revisions. (I have two previously published stories going forward in installments now at BDSMLIB, but in both cases there have been major revisions. In the case of my Jade Pavilion Book 2, the story is already twice or three times as long as the original - and growing.) But it's episodic -- a reader could open almost any chapter whose title appeals to him or her, and make sense out of it and enjoy the numerous, varied, and extended 'thrill scenes'. And hopefully find the exotic setting, characterization etc. compelling enough to be drawn into reading the entire saga (over time).
But I think you're quite correct in judging that a lot of people are put off by very long stories. A story has to really attract my eye (via codes or synopsis) to entice me deeply into a 100 + K story. That being said, quite a few have. Some of Pamela's long stories come to mind. I've sampled almost all of the all-time "top thirty" -- almost all of which are "installment stories" -- based on most hits -- just to get a flavor of what they're like, figuring along the lines of 50,000, 000 Frenchmen can't be wrong.
But sometimes, IMO, they can. ;-) But to each his own. Obviously a great many people enjoy the top stories, or they wouldn't be top stories.
On the other hand, I don't know about any one else, but while I'll read the first (usually short) installment of a lot of stories (and review on the basis of that installment), I have to say that the number of stories that I make a mental note to revisit when the 2nd installment comes out is very small -- less than 10%. Maybe less than 5%.
So, prospective authors -- if you're planning on writing a story in installments, be sure that the first one is the best you can make it. I think most of the regular reader/reviewers are always happy to give a new author or a new story a chance. But most of the time you're only going to get one bite at the apple -- if the first installment is just so-so, (or worse) you're going to lose a lot of us.
Boccaccio